Uber's Behavioral Experiment On Drivers May Raise Ethical Questions, But It Is Hardly Unique

Is the company you work for manipulating you against your own best interests? That’s a question Uber workers may be asking themselves today.

A new report by The New York Times details how Uber Technologies is applying insights from the field of behavioral economics to push its drivers to pick up more fares — sometimes with little benefit to the self-employed workers — in part by “gamifying” goals, according to the article.

As Noam Scheiber writes, “Employing hundreds of social scientists and data scientists, Uber has experimented with video game techniques, graphics and noncash rewards of little value that can prod drivers into working longer and harder — and sometimes at hours and locations that are less lucrative for them.”

One such approach, according to Scheiber, compels drivers toward collecting more fares based on the knowledge that people are highly influenced by goal-seeking. In this instance, Scheiber describes Uber is “alerting them that they are ever so close to hitting a precious target when they try to log off. It has even concocted an algorithm similar to a Netflix feature that automatically loads the next program, which many experts believe encourages binge-watching. In Uber’s case, this means sending drivers their next fare opportunity before their current ride is even over.”

But what exactly is appropriate and prudent for companies to use behavioral science to shape behavior and what it should be is open to debate. The field of behavioral economics, which blends understandings from the field of psychology and economics, is, after all, still relatively new. It stems from the groundbreaking work and collaboration of the psychologists Daniel Kahneman and Amos Tversky who began their study in post World-War II Israel.

In recent years, this research on what really drives human decision-making — behaviors described with jargonny names like loss aversion, inertia, heuristics, comparison neglect and confirmation bias — has been adopted by almost every industry in companies around the world. From FinTech (Acorns) to personal productivity (Google’s Goals) to marketing and even to even voting, this fast-maturing discipline now forms the intellectual underpinning of a quiet revolution in our society. The Obama White House was so enamored by the possibilities for using behavioral economics that it began its own social sciences team to put the work to use on behalf of the Federal government. And for years now, employers have attempted to guide their employees toward a better retirement by embracing the use of auto-enrollment and default investments to try to improve participation in 401(k) plans and steer investments toward toward more diversified portfolios.

Uber, and other so-called gig employers, are in new territory too because their drivers and “gig workers” are independent contractors, not employees, falling beyond the reach of laws governing employers. The company’s official statement on the topic: “We show drivers areas of high demand or incentivize them to drive more. But any driver can stop work literally at the tap of a button — the decision whether or not to drive is 100 percent theirs.”

These aren’t totally uncharted waters. The University of Chicago’s Richard Thaler, one of the world’s leading behavioral economists, has suggested in the past where the line between incentivizing and manipulating lies. His take? He advocates “Nudge for good,” when he signs the book Nudge he co-authored with Harvard Law School’s Cass Sunstein. He elaborates further, urging three guiding principles that such nudges should in general be: “transparent and never misleading,” easily opted out of and with a “good reason to believe that the behavior being encouraged will improve the welfare of those being nudged.”

“Where you’d want to look is where do the interests of Uber and the driver differ and that’s where you want to make sure Uber isn’t taking advantage of them,” Thaler tells me now. “There was no smoking gun that Uber was doing that.”

In other words, intent matters. That’s worth keeping in mind when you’re thinking about Uber — or anyone else using behavioral economics these days.